Green MEP: Panama Papers show UK is at centre of global tax avoidance schemes

Molly Scott Cato MEP, Green Party speaker on economics and finance, has responded to the so called Panama Papers – around eleven million documents held by Panama-based law firm Mossack Fonseca, which reveal how the company has helped clients launder money, dodge sanctions and evade tax. Molly said:

What becomes clear from the revelations contained in the Panama Papers is that it is the UK that is at the centre of the global network of tax havens that facilitates tax avoidance and crime. More than half the companies listed in the documents are registered in British-administered tax havens or the UK itself. This is deeply embarrassing for us as a country and reveals as entirely hollow the Chancellor’s claim to be cracking down on tax avoidance.

If we are to restore our national pride we must see steps taken immediately to deal with the nefarious relationships between apparently respectable companies based in The City and their dubious associates in the Crown dependencies and overseas territories. We need to end the convenient anachronism of such jurisdictions: either they should become a part of the United Kingdom and subject to our laws or they should acquire independence. In addition we need to put an end to shell companies and ensure much greater transparency on beneficial ownership.

REVEALED: IKEA''s tax avoidance - more complicated than its flat-pack instructions?

A new report commissioned by the Greens in the European Parliament has revealed that furniture multinational IKEA has dodged €1 billion in taxes over the last 6 years using onshore European tax havens.

IKEA is using a series of tax loopholes in different European countries, namely the Netherlands, Belgium and Luxembourg, to avoid paying taxes. Molly Scott Cato MEP, a member of the European Parliament’s special committee on tax, said:

Just like its flat-pack furniture, assembling a tax dodge is simple if you know the right tricks. And it’s easy to tuck away out of site where tax administrations will barely notice it. This report deconstructs the massive scale of IKEA’s tax avoidance practices. 

Ikea Bremt Park

This is a company which is held in some affection by British people, so what is revealed will come as a shock to many and risks damaging IKEA’s reputation with UK customers. It is time that corporations such as IKEA realised that being an ethical company goes beyond checking the credentials of suppliers and treating your staff well. Complex tax avoidance schemes are unethical and British people expect companies to pay a fair share of tax to fund the services they rely on.

Scott Cato  has joined other Green MEPs in signing a letter to the EU competition commissioner, Margrethe Vestager, and tax commissioner, Pierre Moscovici, presenting the report as evidence and urging the Commission to carry out a further investigation to verify possible infringement of EU law. Molly said:

This cynical ‘tax hopping’ is reprehensible and we want the European Commission to fully investigate if and how it infringes on EU law, and take action to address this. EU finance ministers, for their part, should work immediately on trying to recoup the tax revenues, which have been denied to them.

Greens also say that a Corporate Tax Package published by the European Commission at the end of January will not go far enough in preventing IKEA using its different tax loopholes. Molly concluded:

There is an urgent need to change the regulatory framework which facilitates corporate tax avoidance in Europe. We badly need public country-by-country reporting rules for all sectors to provide transparency and ensure the tax strategies of corporations can be properly scrutinised. 

We also need a minimum corporate tax rate to end the race to the bottom of tax dumping in Europe. Such measures require the active cooperation of EU governments and most have so far shown no enthusiasm for truly tackling corporate tax avoidance.

Wembley wakes up to the smell of coffee

A well known hairdressers in Bridge Road, Wembley Park, is to close on 29th March and a planning application LINK has been submitted to open Costa Wembley on the site. This involves a change of use from A1 to A3 (cafe and restaurant).

A French Cafe serving coffee and cakes opened a few doors down and closed due to lack of custom. A planning application to turn it into a restaurant was rejected by Brent planning committee.

The hairdressers, LAMARTINE, has a set of loyal long-term customers from the local area. It is known for its creative seasonal shop window displays and excelled itself during the 2012 Olympics and its proprietor is well known and respected in the community.  It will be sad to see a local small business make way for a multinational.

Meanwhile staff were training today ahead of the opening of another multinational coffee chain. This one is housed at Brent Civic Centre and due to open on Monday. 

Last year Starbucks paid UK corporation tax for the first time in five years LINK

Costa benefited from the row about what campaigners saw as Starbuck's tax avoidance and increased its sales LINK

Bullying academy brokers spotlight falls on Jacky Griffin

Fiona Millar has written about the so-called academy brokers on the Local Schools Network site. A particular focus is Jacky Griffin, who was Director of Education for Brent before moving on to Kensington and Chelsea where she was restructured out of a job.  Her brokering work at Gladstone Park Primary has led to allegations of bullying:

There has been a lot in the news this week about academies and their funding. As we suspected all along,   DFE  management of thousands of schools has proved inefficient. Money ear-marked for school improvement has been squandered and while the government sprays money around with abandon on its favoured projects, other schools are facing cuts.

One particular story caught my eye. It was in the Telegraph and concerned the academy brokers. These are representatives of the DFE who move in on schools that are allegedly failing and forcibly convert them to academy status. I say representatives because it turns out that  they don’t actually work for the DFE. They are consultants and paid through personal service companies which pay corporation tax rather than income tax.This is in spite of the fact that Chief Secretary to the Treasury Danny Alexander has said that this practice should be outlawed by government departments.

Recently the Conservative leader of Lancashire County Council complained to the Secretary of State about the activities of these people. So who are they? One name that comes up frequently is that of Jacky Griffin. She featured heavily in the forced conversion of Downhills Primary School and several other governing bodies who are being bullied by the DFE into converting to academy status have mentioned her name to me.

She was also involved in the last Labour government’s moves to encourage academies and trust schools as part of the BSF building programme.

Here is a little bit more information about Ms Griffin, in which she is listed as a consultant at the DFE and a Director of Griffin Taylor Consultancy Ltd. And here is some information about her company’s financial position. As it is an exempt small company, with only two directors, facts are limited but one thing seems clear,the DFE consultancy business is a very comfortable one.

Last year the government did provide some information about the tax arrangements of off payroll consultants and employment agencies. Here is a link . It would appear that the daily rate paid to personal service companies is slightly less than that paid to employment agencies,  but in return the  identities and addresses of the consultants are not provided. Does anyone else know who they might be?